Politicians will never win back voters' faith unless they get serious about reforming party funding rules that encourage suspicions of corruption, a watchdog has warned.

Sir Christopher Kelly hit out over the failure to find cross-party agreement almost exactly a year after the Committee on Standards in Public Life that he chairs produced its blueprint for change.

Talks were revived in April under Deputy Prime Minister Nick Clegg but remain deadlocked because neither the Tories nor Labour will accept restrictions demanded by the other on their main sources of income.

Nor are the parties prepared to countenance the £23 million a year of extra taxpayers' money in public funding recommended by the committee to plug some of the gap left by a cap on private donations.

"The three main political parties committed themselves to doing something about it in their manifestos, and the Coalition Agreement did too. And yet nothing is happening," Sir Christopher told The Independent. "But if they are going to reclaim any public trust, then surely they have got to be proactive in dealing with difficult issues like this.

"We are running out of time. This will require legislation. If they really want to do it, they could still do it. If it were delayed a few years, it would be a shame, but still a prize to get a sensible, sustainable system.

"For the Labour Party, it involves addressing very difficult issues about its historical dependence on the trade unions. For the Conservative Party, it requires giving up the advantage it possesses because it has a greater number of wealthier donors."

Sir Christopher said he feared reform would eventually come in the "half cocked" form of a knee-jerk reaction to the next scandal of the "cash for access" type which forced out Tory treasurer Peter Cruddas earlier this year.

Another was inevitable because the existing system "virtually requires (party officials) responsible for funding to offer access to all kinds of things which, even if not corrupt in practice, have the appearance of corruption,"